FASB Discusses “Portfolio Layer” Hedging Method

At its March 31, 2021, meeting, the FASB discussed its fair value hedging project and made tentative decisions about the “portfolio layer” method (formerly known as the “last-of-layer” method) related to (1) attributes of assets included in the closed portfolio and (2) situations in which “the aggregate amount of the hedged layers currently exceeds the amount of the closed portfolio.” In addition, the FASB directed its staff to draft a proposed Accounting Standards Update (ASU) for a vote by written ballot. The proposed ASU will have a 60-day comment period.